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I wrote to paypal to check this. Their response is that it only works in countries where Paypal Payment Pro is supported, so if the state you are selecting is not supported by paypal, you’ll get the error.

I have noticed the opposite.
Paypal give an error if you leave the state/province field empty.How do I make it a required field?
Btw,I have this problem with paypal website payment pro,using paypal express and paying normally without the express checkout.

I just noticed this affect only paypal italy,because in italy province is a required field.
How can i change the state/province field to be always required for all countries?